Arrow DOGS Of The World ETF For Diversification

Joe Barrato, CEO, Arrow Funds, sat down with Julie Cooling, Founder & CEO, RIA Channel to discuss the launch of two new Arrow ETFs: DWCR (Dorsey Wright Country Rotation ETF) and DOGS (Dogs of the World ETF). DWCR invests in the ten strongest countries with the strongest relative strength and the DOGS ETF invests in the five worst performing non-U.S. countries in the world with the goal of buying them at the bottom of the market.

The Arrow Dorsey Wright Country Rotation ETF (DWCR) seeks to benefit from the “Momentum Anomaly” based on studies that show that countries with high performance in the past will continue to outperform in the near future. Market information inefficiencies coupled with behavioral bias or “investor herding” drives this anomaly, and Nasdaq Dorsey Wright created the Country and Stock Momentum Index based on such research.

The Arrow DOGS ETF seeks to benefit from the “Mean Reversion Effect” or basically the movement back to historical price averages and in the case of DOGS, movement to average country growth rates.

As advisors continue to seek diversification, non-correlated frontier markets can offer international exposure dissimilar to developed countries that tend to move in line with U.S. markets. Both strategies provide exposure to international equity markets, with all the benefits that ETFs offer: transparency, liquidity, lower costs and packaged solutions.